Boss Terry Butcher believes the arrival of Davis - who penned a new two-year deal with Wolves in March - will help ease his injury concerns.
He said: "David is keen to sample the SPL and has committed himself to us and we're grateful to Wolves.
"Aaron Doran's injury against Kilmarnock is the latest in an amazing run of injuries we've suffered, I've never known such a casualty chart in the opening weeks of a season.
"This left us needing to strengthen our midfield and, having just signed a new deal with a Premiership club, Davis has the capability to do really well for us."